Arvato and Deloitte study identifies the key trends and challenges in the high-tech aftermarket
Guetersloh, Germany. The aftermarket has long been just an afterthought to the sales and marketing processes but today more and more OEMs have finally begun to realize its strategic importance as a competitive differentiator. This trend has also been confirmed in a joint study carried out by Arvato and Deloitte, which surveyed many of the world’s leading high-tech companies. The results were definitive; the continued success of high-tech companies requires new pioneering approaches to the aftermarket focusing not only on cost savings, but increasingly more so on customer satisfaction.
Arvato one of the leading outsourcing providers for logistics and aftermarket services and Deloitte recently teamed up to assess the current status as well as future priorities of the aftermarket and reverse logistics strategies of high-tech manufacturers. The study involved extensive personal interviews with executives at 25 global high-tech companies.
In the report the most frequently mentioned trend in after-sales and reverse logistics (24% of interviewees) was the trend for replacements or swap instead of repair, driven by both declining product prices in consumer electronics together with increasing transportation and processing costs for repair. Another broad trend highlighted in the report is the rising importance of social media in after-sales strategies including using user-communities, facebook and twitter to perform first-level support tasks. Changing consumer behaviour was also highlighted as increased device usage, interconnectivity and higher user dependency are all making the returns and repair processes a more involved and urgent event for end users.
The most common pain points highlighted were the setting up and managing of aftermarket and reverse logistics operations in emerging markets and the increasing challenge associated with the requirement to provide fast and efficient delivery of spare parts globally. Significantly the report also revealed that while in past years cost efficiencies were the most important objective in after-sales strategies, this has now been replaced by customer satisfaction as a main objective.
The study found that high-tech companies are increasing their efforts in e-channel solutions and social media in order to further improve and integrate customer interaction and to help them gain greater control of the returns process as early as possible in the returns cycle. Additionally the report highlights the fact that cross-selling and up-selling opportunities can provide a major revenue driver for OEMs however many are currently lacking the capabilities to take advantage of those opportunities with current channel conflicts also helping to keep them out of focus.
The report found that the best-in-class aftermarket operations are those that enjoy a high level of IT systems integration within their organisations’ after-sales value chain resulting in end-to-end process transparency, optimisation and efficiencies.
“The study results are consistent with our experience”, says Marcus Karten VP Global Business Development at Arvato Hightech. “Best-inclass aftermarket services are now an essential element for high-tech companies to differentiate themselves from their competitors and ensure successful long-term brand loyalty in the marketplace. Having anticipated these trends, Arvato Hightech invested heavily into their global locations of reverse logistics & spare parts hubs and an integrated Aftermarket IT systems to serve IT, CE and telecommunication companies. We already see positive impacts on customer satisfaction and Net Promoter Score (NPS) at our clients through our end-to-end approach.”
Wolfgang Kurz, Manager Deloitte Consulting adds: “The survey revealed, how customer satisfaction and total cost of ownership can be improved at the same time, if all elements from first customer contact, through to returns qualification and filtering to reverse logistics and remarketing are fully streamlined and integrated.”
The report can be ordered free of charge on-line at the link below
Arvato is a leading global Business Process Outsourcing provider. More than 68,000 employees in over 30 countries work to bring daily success to business customers by implementing and managing tailormade BPO & SCM solutions. These include all services related to customer care, after sales, supply chain management, digital storage media, digital distribution, financial services, qualified and custom IT services.
The business division Arvato Hightech is a globally integrated supply chain and aftermarket solutions provider serving the high-tech and electronics industries. Leveraging a global network of warehouses and logistics depots, a globally integrated SAP-based WMS and TMS platform, as well as more than 50 years of expertise, Arvato Hightech delivers proven and cost-efficient service solutions. Arvato Hightech provides a comprehensive range of services and solutions for its business partners in the consumer electronics, hightech, telecommunications, networking and industrial sectors. These services include: Warehousing and Distribution, Sourcing and Postponement, Reverse Logistics and Repair, Transport Management, Service Parts Logistics and e-Commerce solutions. Arvato’s broad service portfolio allows clients to reduce their total supply chain costs and increase shareholder value by innovating and improving entire business processes.